Arizona could deduct 3 percent more of workers' salaries to finance state retirement program

More than 6,000 staff members may be losing up to 3 percent more of their paychecks to retirement contributions starting July 1, if projections from the state agency in charge of setting retirement withholdings for those on state-based plans materializes.

The deductions for retirement are increasing for 184,000 state employees across Arizona due to losses in the stock market, the Arizona State Retirement System stated in mid-September.

A quick glance · 6,000 classified staff at UA pay mandatory retirement to the Arizona State Retirement System. · 4,000 appointed personnel can choose the state retirement program. · The system has lost money due to an economic downturn, while ASRS has increased benefits for some. · Deductions for retirement are currently the smallest they have been in 12 years

The larger deductions will also go toward covering last year's increase of retirement benefits for those who were employed at UA for at least 10 years and who have been retired for five years.

State employees, including all classified staff at the UA and appointed staff, choosing to use the state's program currently pay 2.49 percent of their salaries for retirement contribution.

Under the new plan, employees could pay 5.1 percent, the ASRS estimated.

If the agency starts taking 5.1 percent, for example, administrative assistants who makes $25,000 per year would have $1,275 deducted from their paycheck instead of the $622 now withheld.

The Arizona State Retirement Agency said there would certainly be more withheld from paychecks for retirement. The question ÷ which they have yet to answer ÷ is just exactly how much.

The "best guess estimates," are available now, but the official number is expected in November, according to the ASRS.

About 45 percent of UA employees are classified staff, said Gordon Groat, vice president of the staff advisory council.

Aside from the 6,000 classified staff at the UA, any appointed staffers who choose to use the state's retirement program will also have more money deducted from their paychecks starting in July.

Of the 10,000 UA employees who are eligible for the state's retirement program, 4,000 are appointed staff and have the option of choosing between the state's program and an optional retirement plan with four different providers, said Marcia Chatalas, director of human resources and benefits.

The human resources department has not received any phone calls or concerns about the proposed increase, said Travis Vincent, an administrative assistant in the human resources department.

"Like any adjustment, the increase will bother a few people," Chatalas said. "The ASRS is trying to give people affected time to plan for it, telling them early."

Although he has not yet heard complaints about the increase, Gordon said he expects most employees do not know about the estimate retirement contribution due to other important issues with the university, like the $16.6 budget shortfall.

At least one UA employee thinks the additional withholding is unfair.

"I don't think it would be fair to charge an extra 3 percent," said Donna Knight, an administrative assistant for law administration. "But, at the same time, I like working here so it wouldn't be worth quitting my job."

Withholdings for retirement have decreased from the past high of 7 percent during the past 10 years.

Deductions for retirement are the lowest they have been since 1990.